ASIC promises to work with small businesses facing climate disclosure green tape.
The Australian Securities and Investments Commission (ASIC) has provided relief to small and medium-sized enterprises (SMEs) concerning mandatory climate risk reporting. While larger businesses will be required to disclose their greenhouse gas emissions and other climate impacts, SMEs are exempt from directly reporting this data.
However, the exemption comes with a caveat. Larger businesses are required to report Scope 3 emissions, which encompass indirect emissions caused throughout their supply chain. This means many SMEs will still be indirectly involved in the process by providing relevant climate data to their larger clients and suppliers.
ASIC acknowledges the potential burden this places on SMEs and assures them of ongoing support. The corporate watchdog will collaborate with SMEs to streamline data forwarding. Additionally, the initial phase of Scope 3 reporting will likely rely on estimates, reducing the immediate accounting burden on smaller businesses.
Australian business lobby groups, while acknowledging the importance of addressing climate change, have expressed concerns about the potential costs associated with the new regulations. They emphasise the need for a balanced approach that considers the cost-benefit ratio for businesses.
Source: ASIC promises to work with small businesses facing climate disclosure green tape: https://www.smartcompany.com.au/climate-change/asic-climate-disclosure-scope-3-small-business/
Demystifying ESG for SMEs: How ESG&I Can Help You Navigate the Upcoming Disclosure Landscape.
Australia's new mandatory climate risk disclosure rules bring a wave of change, particularly for large businesses. But even small and medium-sized enterprises (SMEs) will likely feel the ripples. The requirement for larger companies to report Scope 3 emissions, encompassing their entire supply chain, means SMEs may be asked to provide data on their own environmental impact.
At ESG&I, we understand the potential confusion surrounding Environmental, Social, and Governance (ESG) factors, especially for SMEs. Here's how we can support you in navigating this evolving landscape:
1. Understanding Your ESG Footprint: We'll help you assess your business's impact across the ESG spectrum. This includes your energy consumption, waste generation, and social practices within your workplace.
2. Streamlining Data Collection: Compiling data for larger companies in your supply chain can be overwhelming. ESG&I can help establish a system for collecting and reporting relevant environmental metrics, making the process smoother for both you and your clients.
3. Building Transparency and Trust: A strong ESG performance can enhance your brand reputation and attract environmentally conscious customers and partners. We can help you develop a clear and concise communication strategy to showcase your commitment to sustainability.
4. Future-Proofing Your Business: ESG considerations are becoming increasingly important for businesses of all sizes. By proactively addressing these factors, you'll be well-positioned to meet future regulatory requirements and investor expectations.
Beyond Compliance: The ESG Advantage
While the upcoming regulations are a driver, ESG goes beyond just compliance. It's about building a more sustainable and responsible business model. Here's what a strong ESG performance can bring you:
Reduced Costs: Implementing energy-saving measures and minimising waste can lead to significant cost savings.
Enhanced Innovation: A focus on sustainability can lead to the development of new, eco-friendly products and services.
Improved Employee Engagement: Employees who feel their company is making a positive impact are often more motivated and productive.
Attracting and Retaining Talent: A strong ESG performance can make your company a more attractive employer to top talent, especially those who value sustainability.
Next Steps: Partner with ESG&I.
At ESG&I, we are passionate about empowering SMEs to navigate the ESG landscape. We offer a range of services tailored to your specific needs, from initial assessments to developing a comprehensive ESG strategy. Say hello@esgandi.com.au
Don't wait until the regulations hit. Take a proactive approach to ESG and gain a competitive advantage. Contact ESG&I today for a free consultation and see how we can help your business thrive in the new era of sustainability.
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